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Social media's possibilities in business-to-business customer interaction in innovation process

Social media's possibilities in business-to-business customer interaction in innovation process. Presented at XXII ISPIM Conference June 2011 Hamburg. Authors: Jari Jussila, Hannu Kärkkäinen and Maija Leino. Original abstract title:Social Media's Possibilities for Improving Business-to-Business Customer Interaction and Understanding. Taken from The Proceedings of the XXII ISPIM Conference held in Hamburg, Germany - 12-15 June 2011 ISBN 978-952-265-092-4. The full paper and/or presentation is available to current members of ISPIM who must log in to the Members Section of http://www.ispim.org

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2Definition of social media and web 2.0• Web 2.0 means technologies that enable users to communicate, create content and share it with each other via communities, social networks and virtual worlds, making it easier than before.• They also make it easier to have real life experiences in virtual worlds and to organize content on the internet with content aggregators. (Lehtimäki et al., 2009)• Such tools and technologies emphasize the power of users to select, filter, publish and edit information (Tredinnick, 2006), as well as to participate in the creation of content in social media.• According to Constantinides and Fountain (2008), "Web 2.0 is a collection of open- source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes. Web 2.0 applications support the creation of informal users’ networks facilitating the ﬂow of ideas and knowledge by allowing the efﬁcient generation, dissemination, sharing and editing / reﬁning of informational content."

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3Focus on B2B• Key factors affecting B2B interaction • fewer customers and more in depth customer relationships in B2B’s • quite interconnected buyers in B2B’s • longer-term customer relationships in B2B’s • gatekeeper persons between customers and B2B’s• The above topics mean, first of all, that since the above issues have to be taken into consideration, customer interactions often take very different shapes in B2B’s than in B2C’s.• Second, these topics create both opportunities and challenges for B2B customer interaction.• Third, social media has been already experienced to offer quite new possibilities in avoiding some of the created challenges (e.g. overcoming gatekeeper persons in B2B’s) and strengthening the existing and creating even quite novel interaction forms concerning the opportunities (e.g. Gillin & Schwartzman, 2011; Bernoff and Li, 2008).

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4Social media use with customers vsperceived generic opportunities Perceived generic opportunitiesSocial media can be used to increase customer orientation Social media can offer significantopportunities in involving customers in innovation rather little or very little moderately rather much or very much Social media can offer significantopportunities in involving customers in service development Social media useSocial media use in collaboration with customers 0% 20% 40% 60% 80% 100%

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6Social Media Potential in InnovationProcess Phases Potential of social media in different innovation process phases in B2B companies The front-end phase rather much or very much somewhatThe product development phase rather little or very littleLaunch/commercialization phase 0% 20% 40% 60% 80%

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7 Customer interaction forms• No direct interaction • B2B customer information and knowledge can be shared and created internally, e.g. by wiki-based tools and communities, • and various analysis tools can be utilized for creating customer information and knowledge from e.g. social media supported communities even without direct interaction with customers, such as data mining and social network analyses• One-way interaction (we define this as mainly one-way interaction, even though occasional feedback might be received) • One-way; company to customers (Passing product or service marketing related information to customers) • One-way; customers to company (Collecting customer information to support product development)• Two-way interaction (interaction is essentially company’s and customers’ mutual interaction with no or only little interaction between customers)• Community-interaction (we define this as company using or participating in mutual interaction in various types of customer communities, where important feature is mutual interaction between customers)• User toolkit - supported interaction (user toolkits are an essential part of co-creation and allow new ways for customers as well as the company or companies to interact with each other)

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Customer Ideation phase (idea generation) Concept and Development phase Product Testing and Support phaseinteraction forms 8No direct Detecting weak signals from Second Life data and from Using Twitter in marketing research – to read what Using social networking profiles and their links to other groups to scope observing changes in search behavior (Cachia et al., customers have to say (Kaplan & Haenlein, 2011) out customers interests (Gillin & Schwartzman, 2011), use of webinteraction 2007), Social bookmarking tools in finding and collecting analytics to see what keywords users are searching and using that weak signals of possible future needs (Näkki & keyword information to create an editorial calendar (Thomas & Barlow, Antikainen, 2008) 2011)One-way Sharing and discussing about industry trends with Keeping customers informed of upcoming product features Automating sales proposals to customers using mashups(Ogrinz, 2009), customers (e.g. IBM PartnerWorld Community) and products (e.g. NI Labs) reverse product placement by creating a fictional brand in fictionalinteraction: environment and then releasing it into the real world (Wasserman,(company to 2007), using LinkedIn to get past the traditional gatekeeper departments,customers) who often try to restrict access to decision makers (Gillin & Schwartzman, 2011), customizable widgets that deliver content to customers (Thomas & Barlow, 2011), sales promotions in Twitter (Kaplan & Haenlein, 2011)One-way Users/customers can vote for conference themes to be Blogs can provide customer need information for product Using mashups to push customer enhancement requests from customer discussed of in Second Life (Barker, 2008), users tags and development (Singh et al., 2008) service to product managers (Ogrinz, 2009), using blogs to get feedbackinteraction:: tag clouds can be used in discovering weak signals and and to understand customers’ perceptions of new product features(customers to trends (Cachia et al., 2007), customers can express their (Singh et al., 2008)company) ideas in online suggestion boxes setup by companies (Prandelli et al. 2006)Two-way Using professional customers as “credible private focus Designing of real world items in collaborative spaces, e.g. Answering product questions, troubleshooting technology challenges groups” in LinkedIn (Gillin & Schwartzman, 2011) Second Life (Ondrejka, 2005) and solving customer service issues in Twitter (Thomas & Barlow,interaction (The 2011), hearing what customers have to say and fixing customercompanys and its problems (Kaplan & Haenlein, 2011)customers mutualinteractionCommunity- Using wikis to share ideas (inside and outside of Online test laboratory can be used to gather and to discuss Exposing customer complaints to public and empowering users to organization) , also enabling asynchronous distributed about feedback about prototypes (Näkki & Antikainen, submit and vote on ideas and product improvements (Warr, 2008), blogsinteraction (The brainstorming (Standing & Kiniti, 2011), idea 2008), Wikis can focus on certain products (such as NI in confronting negative feedback (Singh et al., 2008), IBM’s YouTubecompanys and the competitions using open innovation intermediaries LabVIEW, Red Hat JBoss) or industry (e.g. KATU – channel where partners and customers were invited to upload videoscustomer (InnoCentive, NineSigma, Yet2.com) to screen for ideas Kaupan tutkimus), blog based tool where users may explaining how IBM solutions had helped their businesses(Marketo,communities and solutions from communities (Piller and Walcher, suggest needs and development ideas for new products and 2010 ), Marketo Inc. marks tweets about their product as ”favourites”, 2006 ; Antikainen 2011) services, also the rating and commenting of ideas by other providing links to these on their website, allowing prospects to see whatmutual interaction) users (Näkki & Antikainen, 2008) other customers are saying about their product and enabling “social validation” (Marketo, 2010)User toolkit – Users toolkits enable users to design products and User toolkits for innovation, e.g. software design tools for MyDeco uses configurator and design tools, combined with social media services to fit their own needs (von Hippel and Katz, customers to perform design (of company products) and communities that are used by consumers in household room designsupported 2002), MyDeco is a third-party enabled community, that themselves (von Hippel, 2001 ), user design through web and decoration. This provides customer understanding for architects,interaction provides community-integrated home design interfaces that enable customers to select interactively the designers and manufacturers. (mydeco.com) configurators and design tools for consumers, that bridge features they prefer in their ideal product (Dahan & Hauser, consumers, designers and architects, furniture and home 2002 ) decoration companies, enabling them e.g. to discover market trends and weak signals. Jari Jussila 9.11.2012

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9Some key findings• On the basis of the results, social media truly seems to offer very novel and innovative ways to deepen and widen the B2B- related customer interaction, for the sharing of customer- related information, as well as for the resultingly created new customer information and knowledge.• In many ways that B2B’s utilize social media are different and quite unique compared to the traditionally in B2C’s used approaches (e.g. dedicated Linked-in groups). We found also an interesting example of commercial third-party -enabled MyDeco community for house decoration, integrating the use of configurator and design toolkits with community and social media, which could be used as a model for also B2B purposes and for new ways of B2B customer interaction.

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10Conclusions• Based on our results, currently there seems to be a significant gap between the perceived social media potential and actual use in B2Bs• Quite interestingly, concerning the experienced potential of social media in different types of customer interaction in studied B2B’s, the experienced highest potential was in the one-way customer interaction (both company to customer and customer to company). Less potential was seen in the more social and collaborative types of interaction forms, which are considered as characteristically the “core“ of social media• We have demonstrated in our study that B2B environment does differ significantly from B2C environment in several ways, especially when the contexts of innovation management, customer interaction and creation of customer knowledge and understanding are in the focal interest.• Especially more B2B- oriented empirical and theoretical research should be carried out to gain more insights in the more extensive usability of social media in various B2B industries and contexts